These Manufacturing Executives Use IoT to Increase Profit and Drive Value for Customers [Interviews]
We interviewed leading Executives from Schneider Electric, ABB, Lutron, and Mestek, Inc to find out just how these manufacturing powerhouses are using IoT (Internet of Things) to increase company profit and drive value for customers.
Internet of Things (IoT) is, as its name represents, where the internet meets things; where the physical world meets the internet. Things are literally anything and everything – the things we encounter in our daily lives – goods, objects, appliances, machines, buildings, vehicles, etc.
Conceptually, the Internet of Things implies physical objects being able to utilize the internet to communicate data about their condition, position, and other attributes. Various sensors placed on objects can track features such as motion, air pressure, light, temperature, water flow, state, and size, and then transmit that data so that it can be analyzed and acted upon.
Worldwide spending on the Internet of Things (IoT) is forecast to reach $772.5 billion in 2018. A new update to the International Data Corporation (IDC) Worldwide Semiannual Internet of Things Spending Guide forecasts worldwide IoT spending to sustain a compound annual growth rate (CAGR) of 14.4% through the 2017-2021 forecast period, surpassing the $1 trillion mark in 2020 and reaching $1.1 trillion in 2021.
IoT & the Value Chain for Buildings Products
IoT-enabled products raise a new set of strategic questions for manufacturers, distributors, and contractors who work with buildings products on how additional value can be created using IoT, how the data captured through the devices is utilized and managed to add value to end users, how relationships with traditional channels are redefined, and what roles companies should play as the industry boundaries are expanded.
More companies are relying on data from IoT-enabled products that can be leveraged for optimizing the use and operations of buildings and workplaces. As an example, the Trimble Basis philosophy at this time is "hardware/sensor agnostic" or "mixed fleet,” meaning that they are not selling sensors at this time, but are building adapters to other sensors and systems that could provide useful building analysis. This makes almost all of the various manufacturers of sensors, or sensored equipment, potential partners for their solutions. Other companies are engaging with manufacturers on Building IoT to create a value chain for products across industries.
Manufacturers need to plan for changing product design, new marketing, and go-to-market strategies, new manufacturing processes, after-sale service and creating the need for product data analytics and security. In addition, distributors and contractors need to be trained adequately to represent the products knowledgeably to the market.
We interviewed a few manufacturers who are successfully integrating IoT into their traditional products to dramatically improve and add more value to end users. We also interviewed a distributor, Shearer Supply, and a contractor in the buildings space, Atlas Electrical, Air conditioning, Refrigeration & Plumbing Services, Inc., to understand what they are doing to take advantage of the IoT movement. Below are their insights and how they are navigating the world of IoT-enabled building products.
Iram Shah SVP, Customer Transformation
Does Schneider offer IOT-enabled products to customers in the building's space?
Yes – We have a full IoT solution stack: EcoStruxure for Building including Power, IT and Building Management. In the building space, we have a complete IoT technology stack of solutions for critical facilities like hospitals and non-critical facilities like hotels and office buildings.
Our IoT stack includes connected products like PowerTag® - The Smallest Wireless Energy Sensor available today, Masterpact MTZ circuit breakers, connected systems like Smart Electrical Panels and so on. These products and components can seamlessly integrate with the next level of the stack which we call ‘Edge Control’, our core building automation and management system: EcoStruxure Building Operation.
Finally, the topmost level is about analytics and associated services. We have several apps like EcoStruxure Building Advisor, EcoStruxure Workspace Advisor, EcoStruxure Resource Advisor to provide services at this level.
Are the IoT-enabled Schneider products affordable to customers or are they premium products targeted at high-end customers?
It’s a question of value. For example, a hospital implementing our full IoT stack benefits from a solid return on investment. Power and building management are critical functions in a hospital where failure is not an option. We encourage our customers to look at lifetime value and compare it with the potential loss of lives, reputation, and brand, then the economics become clearer. Likewise, for hotels – our IoT solution stack brings energy efficiency, operational efficiency, better guest experience, and comfort. This leads to profitability, not only through savings but a better guest experience— which means better reviews. Hotels with better reviews can demand a premium that customers are willing to pay.
How have the IoT products been received by contractors? Are they easy to install and implement? Do contractors need training and does Schneider provide it?
While few of our offers like PowerTag are simple enough (needing to be just “tagged” or pushed), others need education and training. We have application guides and technical documentation as part of our training delivered in class and online. For integrators of our IoT products and solutions, it’s beneficial on several counts – it opens up new business areas for them and it is also a great opportunity to differentiate from competition by providing services from power distribution and power management to building automation and building analytics. At the end of the day, they are able to deliver added value to the ultimate end customer.
How have the IoT products been received by the end users?
We have several customer successes where customers across office buildings, research facilities, and manufacturing facilities reduce energy spend by 15-30% and gain a positive ROI in a matter of months through EcoStruxure Building Advisor, which identifies and automates finding of efficiency opportunities.
Other cases like The Edge –the most sustainable office building on earth, located in the Netherlands, leverages Schneider EcoStruxure for Buildings which makes it possible for the office building to be a positive energy building. It generates more energy than it consumes.
Overall, across all Schneider Electric markets (Buildings, Datacenters, Industries, and the Electricity Grid) – our IoT portfolio accounts for approximately 45% of our total revenue - signifying large-scale adoption of our solutions by our customers.
What are the benefits of IoT to end users?
For hospitals and critical buildings, it’s all about the reliability of power and uninterrupted power supply. This is possible through predictive maintenance of critical assets which are connected and can be monitored 24/7. We can also do trend analysis and detect anomalies and possible failure points in future. We offer a digital hospital solution which provides the right information to the right person at the right time, since it integrates several disparate systems. This brings not only enhanced patient safety and experience, but it also helps hospitals being operationally more efficient. We know, for instance, that nurses spend 5-30% of their time on a typical shift looking for medical assets, and hospitals purchase more assets than necessary because they aren’t shared efficiently. Through the Schneider Real-Time Location System, we help track both assets and people, and this improves hospital asset utilization, staff efficiency, and patient flow.
For hotels, guest satisfaction is a key success factor for our customers. For example, instead of using traditional key card switches in hotel rooms, through EcoStruxure Guest Room, Expert guests can experience customizable occupancy-based scenarios. The room temperature & lighting are preset to the customer preferences. The guest room is also monitored for occupancy and adjusted accordingly – significantly reducing energy waste and improving the bottom line.
What are the benefits of IoT to Schneider?
Through IoT, we have been able to occupy a unique position in the building market. We are proud to have been recognized as a leader in Building Energy Management for several consecutive years now by Navigant and Verdantix, which are independent analyst firms.
But I would like to add that there are benefits not only for our customers and Schneider here but for all of us at large. Buildings consume 1/3rd of the world’s energy use and they are also a sector where most efficiency opportunities still remain untapped. So while that’s great news from a Schneider business opportunity perspective, we also see a world where Buildings will drive de-carbonization through managing energy demand at the consumption side for a better planet.
Does Schneider collect usage data through the IoT devices? How is it being used to provide value to the end users?
Our offer is tailored as per customer needs and requirements. We offer both on-premise and secure on-cloud solutions. As described in the earlier example, we provide remote monitoring facilities for critical facilities, which allows us to do predictive maintenance in critical facilities
Discover Schneider IoT:
Bernie Ausdenmoore, Product Marketing Director – Building Products, Electrification Products Division
Does ABB offer IoT enabled products to customers in the buildings/construction space?
ABB offers IoT enabled products to the buildings and construction space.
In the US, we currently offer the WELCOME Door Entry System which allows you to remotely monitor your house with the use of a smartphone. You can answer the door, provide access to the property, view cameras, etc. remotely through the ABB Welcome IP gateway. This product is used in single-family and multifamily applications.
In Europe, we have the ABB free@home system where homeowners are able to control everything from their blinds, lighting, heating, and door communication using either a switch on the wall, a laptop, or smartphone for added convenience and flexibility.
In Europe, we also have the KNX system for environmental control of homes and buildings. We hope to introduce the whole offering of product in the US in the near future.
Are the IoT-enabled ABB products affordable to customers or are they premium products targeted at high-end customers?
The products mentioned above are affordable in the low-mid to high-mid segment and can get as expensive as you want to go.
How have the IoT-enabled products been received by contractors? Are they easy to install and implement? Do contractors need training and does ABB provide training?
Reception has been good. The systems are relatively easy to install and configure. There is some training that is involved, which we provide.
How have the IoT-enabled products been received by the end users?
End users see the ease of use and flexibility that these systems have to offer.
What are the benefits to end users?
Simplicity and ease of use. The ability to see and speak to who is at your front door without opening the door gives a feeling of safety and convenience. You can do this even if you are not at home through your smart mobile device. You can access the front door camera without the doorbell ringing.
What are the benefits of IoT to ABB?
Providing the homeowners a complete package from one company promotes return customers.
Does ABB collect usage data through the IoT devices? How is it being used to provide value to the end users?
We do not collect data for our own use.
Discover ABB IoT:
Ramin Mehrganpour, Senior Vice President
What IOT-enabled products does Lutron offer to consumers?
The Caseta Wireless product line from Lutron caters to the residential market. You can control lighting, shades, and temperature from anywhere in the world so lights are not left on and shades are not left open when you are away. It is a designer product for the mass market. You can schedule your lighting and shades to adjust at different times during the day. It allows you to create and save personalized lighting scenes like a ‘good night’ scene, a ‘movie’ scene etc. It has a “Smart Away” feature that randomly turns lights on and off during the evening when you’re not home that makes it look like you are at home. The product captures information about your lighting and whether a shade is open or closed. Through your iPhone, you make adjustments when you are away. It has geofencing capabilities as well.
Lutron also offers ‘Vive’, a lighting control solution for existing and new commercial buildings. The Vive solution saves energy, improves comfort, and enhances productivity. Lutron implements Vive solutions in offices, schools, and universities. The solution enables centralized control, monitoring and continuous system optimization. For classrooms and offices with 50,000 square foot space, the ‘Vive’ product line works very well. It is being received extremely well since its launch earlier this year. It is the best product from a code compliance perspective as well.
How are the products priced?
Products are reasonably priced.
Are the products easy to install? Do you provide training to contractors?
The Caseta Wireless products take less than fifteen minutes to install. They work through the router in the house. Lutron provides training to distributors and contractors.
How have the IoT-enabled products been received by contractors?
The IoT enabled products have been received extremely well by contractors. They love them, and installation does not require any programming.
How have the IoT products been received by the end users? What are the benefits to them?
End users can monitor and turn the lights on and off remotely. They can turn on lighting and air conditioning twenty minutes before they come home. End users have the ability to control light and temperature and increase comfort. It can also be used as a security device. There are energy-saving benefits as well. You can dim the lighting to 50% and save on energy. You can turn your air conditioning on at 8:00 PM or turn it off while you are on a vacation. If you forget to turn off your lights before going on a vacation, you can turn it off over the internet.
Does Lutron collect usage data through the IoT devices?
Lutron does not as a company collect data. The end user has the ability to analyze data such as winter vs. summer usage, so they can have insight into exactly what that they need.
Any other comments?
Lutron’s Wireless technology is extremely robust, safe and of high quality. The technologies work with no interference, and they work seamlessly. The technology is tested multiple times and offers a high degree of security so it cannot be hacked.
Kirsten Fisher, National Accounts Manager
What IoT-enabled products does Mestek offer?
Mestek offers an intelligent boiler control system called HeatNet. Heatnet uses the concept of modulation to optimize the efficiency and output of a boiler system. It enables monitoring and control of RBI boilers for improved efficiency and can easily be integrated into a building management system. Third parties can monitor our boilers too. We mostly work in the commercial space.
Our HeatNet Technology provides consistency and feedback through digital communication. Through continuous monitoring of several system characteristics, such as boiler temperatures, limit circuit inputs and overall system demands, HeatNet modulates boiler-firing rates to maximize turndown ratios and maintain peak efficiency – regardless of the load.
HeatNet not only maintains efficiency in select, stand-alone boilers but can also operate as part of a multi-boiler Master/Member network of up to 16 boilers. It is also capable of functioning as a boiler management system and can incorporate a mixture of condensing boilers and non-condensing boilers, or can be utilized in base-load applications with existing boiler units. Built-in fail safes ensure the safety and reliability of an entire boiler system.
Does Mestek provide training to contractors for these IoT-enabled products?
Mestek offers a training class and lab for Mastek products. The products can be integrated into other building management systems too. We have a rep network that works with contractors. Mestek has a technology division – so we’re able to train the market with their help.
What are the benefits of these products to end users?
These products provide higher efficiency benefits to consumers. The system ensures that there is equal wear across multiple boilers, monitors efficiencies, allows for remote monitoring and troubleshooting and allows repair professionals to order parts prior to the repair call to improve service speed.
Does Mestek capture analytics from the products?
Analytics are captured for select customers with permission and are used for research and development of new products and for creating product updates.
Atlas Electrical, Air conditioning, Refrigeration & Plumbing Services, Inc.
Contractor Interview: Sarah Hammond, President/COO
Do you see a lot of demand for IoT-enabled products?
We see a lot of demand for smart products like the Nest Thermostat. Smart Security Systems are in demand as well. Another unit that we see demand for is a humidity control system and a thermostat that reduces humidity in the air.
Do manufacturers provide training to contractors for installing IoT-enabled products?
Carrier and Johnson Controls are examples of manufacturers that provide good training to contractors.
What are the benefits of IoT enabled products to end users?
End users love the benefits of remote monitoring, power and cost savings.
Distributor Interview: Michelle Shearer-Rodriguez, President
Do you see demand for IoT-enabled products?
There is a lot of demand for smart products, and there are consumers who are willing to pay for them. We carry them. We see a lot of demand for the Nexia as well. Nexia is an all-in-one app that allows you to connect and control all of the elements of your smart home, creating a seamless system. Nexia is built on an open architecture platform, and it works with products from a number of different manufacturers.
Do manufacturers provide distributors with training on smart products?
Distributors need a lot of training, so we can, in turn, train dealerships and contractors. We are in an aging industry. The younger people coming into the industry are embracing technology. The older people who are not as tech savvy - need more training.
What are the benefits of IoT-enabled products to end users?
The benefits of the smart products we carry range from improved energy efficiency, remote monitoring and control, and ‘speed to comfort’. Consumers do not want to wait for two hours for their home to cool before they walk into the house after a weekend of being away.
IoT-enabled smart products are changing how value is created for customers and how companies compete with one another in the building's space. The boundaries of competition are being redefined. Smart products are giving rise to the next era of IT-driven productivity and profitability growth for companies and their customers. These smart products are radically improving our ability to meet many business and individual needs. Products being built will be more effective, safe, efficient and reliable while at the same time conserving natural resources such as water, energy and raw materials. Businesses will need to train and empower workers within their value chain so they can, in turn, create value for customers using these smart products.
Given how quickly the field is evolving, businesses and the government will need to work together to agree on regulations to set standards that drive innovation and value while protecting data and privacy. So what does IoT mean for your firm? Have you started implementing processes that prepare your team for the next big innovation in smart products?
Sumana Rao holds a Masters Degree in Information Systems from the University of Texas and a Masters in Business Administration from T.A. Pai Management School, Manipal, India. She works with manufacturers and distributors to develop content strategies that support their overall digital strategy to gain market share and improve customer retention.